Aug. 29 (Bloomberg) -- Infosys Technologies Ltd., India's second-largest software exporter, said it may win more business from U.S. clients if the subprime crisis curbs spending there, driving companies to cheaper service providers overseas.

Infosys's major customers don't expect U.S. economic growth to slow for now, Chief Executive Officer S. Gopalakrishnan told reporters in Mumbai today. The company doesn't plan to change its earnings forecasts as its back-office unit, which provides services such as call-center operations, hasn't yet seen a significant impact from the mortgage issue, he said.

``We are not seeing any slowdown in terms of number of deals or any such thing from the U.S. yet,'' Gopalakrishnan said. ``Even when companies are looking to cut costs the offshoring model makes sense.''

The comments may ease investor worries about sales at exporters such as Bangalore-based Infosys, which gets about 63 percent of revenue from the U.S., after the strongest rupee growth in three decades dented last quarter's earnings. Rising delinquencies on subprime mortgages in the U.S. have led to an increase in borrowing costs and made it harder to access credit.

Shares of Infosys fell 5 percent in the past three months, against a 2.8 percent gain for the Bombay Stock Exchange Sensitive index. The stock dropped 1.4 percent to 1,855 rupees as of 2:14 p.m.

Infosys is experiencing strong demand for its services from industries such as telecommunications, retail and financial services. Its business from Europe, which contributes 26 percent to sales, is growing 60-65 percent, Gopalakrishnan said.

Cutting Estimates

Infosys, whose customers include DaimlerChrysler AG, in July cut its profit and sales estimates because of the rupee's gains.

The Indian currency climbed 6.8 percent against the U.S. currency in the three months ended June 30, the biggest quarterly advance in more than three decades, according to data compiled by Bloomberg. A stronger rupee translates to lower earnings for Indian exporters when earnings are repatriated.

Gains in the rupee, Asia's best-performing currency in the past six months, and rising wages are eroding profits, Gopalakrishnan said.

Infosys plans to increase fees for new customers by 3 percent to 4 percent, and will negotiate a 2 percent increase in rates on existing contracts, he told reporters in Mumbai.

The company raised prices for new orders by 3 percent to 4 percent, and by 2 percent to 3 percent for renewed contracts in the quarter ended June 30.

Infosys is pursuing ``large'' deals in managing networks for clients, Gopalakrishnan said, without providing details.

China Outlook

The software exporter will continue to invest in China and hire more workers in the world's fastest-growing major economy, Gopalakrishnan said. The opportunities there ``can't be ignored,'' even though Infosys's business in China is expanding slower than anticipated, he said.

Infosys BPO Ltd., the back-office unit, posted profit of 360 million rupees and sales of 2 billion rupees in the three months ended June 30. The company didn't provide comparative figures.

To contact the reporter on this story: Shailendra Bhatnagar in Mumbai at sbhatnagar3@bloomberg.net.

Last Updated: August 29, 2007 05:34 EDT